Latino Daily News

PEMEX Finds Large Oil Reserve in Gulf of Mexico

Mexican state-owned oil giant Petroleos Mexicanos, or Pemex, has made a large deep-water light crude discovery in the Gulf of Mexico off the coast of the northeastern state of Tamaulipas, President Felipe Calderon said Wednesday.

Calderon did not quantify how much the Trion 1 exploration well might produce but Pemex sources say they expect to certify 350 million barrels of crude from the find and that total reserves at deposits in Mexico’s Perdido Fold Belt - where the discovery was made - could amount to as much as 10 billion barrels.

The oil discovery - which was made with the Bicentenario rig and is the first in Mexico’s deep-water region - is an “important achievement” that “further strengthens” Pemex, Calderon said in a ceremony at the Los Pinos presidential residence.

“It is moreover estimated that this deposit could belong to one of the most important deep-water zones in the Gulf of Mexico. That entire zone, this oil system (Perdido), could have the potential to produce ... from 4-10 billion barrels of crude oil,” the president said.

Pemex expects to certify new 3P (proved, probable and possible) reserves of as much as 250-400 million barrels of crude, “probably more,” from the find announced Wednesday, Calderon said.

“So we get an idea, if these parameters are confirmed, the figure ... would be equivalent to a third of Petroleos Mexicanos’s annual petroleum production” of just under 1 billion barrels, the president said.

Natural gas had been discovered during work in that offshore region over the past six years, but not oil. The crude discovered is also of high quality, making it easier to refine and more profitable than the heavier varieties that make up the bulk of Mexico’s current proved reserves.

He added that Pemex’s reserve replacement ratio (the amount of proved reserves added to a company’s reserve base during the year relative to the amount of oil and gas produced) was less than 50 percent when he took office in 2006, but will be higher than 100 percent when he steps down in December.

The president said that Pemex has doubled its investment outlay during his administration.

For his part, Pemex CEO Juan Jose Suarez Coppel said in a radio interview Wednesday that Trion 1 is located 39 kilometers (25 miles) south of the countries’ maritime boundary and therefore is not shared by the United States.

The executive said it will take “at least five or six years” to produce the first barrel of crude from the Perdido area but that “underwater robots” will now begin to be prepared for that task.

Suarez Coppel said the find lies at a water depth of 2,500 meters (8,200 feet) and a total depth of 4,500 meters, making it one of the 10 deepest in the Gulf of Mexico.

Mexico’s oil output totaled almost 3.4 million barrels per day in 2004, but has since fallen due to a sharp decline in production at shallow offshore Cantarell, formerly Mexico’s most productive field, and many years of insufficient investment.

The government, however, said last year that Pemex had succeeded in halting a steady annual decline in its reserves dating back to 1979.

A recent oil sector overhaul in Mexico gave the oil monopoly - created when the country’s oil industry was nationalized in 1938 - more freedom to undertake projects with private firms, which are to be hired under incentive-based service contracts.

Experts say the domestic energy industry’s future is in the deep waters of the Gulf of Mexico.

The state oil monopoly, however, lags far behind U.S. oil majors in its ability to develop that challenging region, a problem blamed by many analysts on the company’s highly regulated operations and the fact that it accounts for nearly a third of the Treasury’s revenues, leaving little money to invest in new technologies.

Pemex, the world’s fourth-largest crude producer at 2.5 million barrels per day, is one of the few oil firms worldwide that handles all aspects of the productive chain, from exploration to distribution and the marketing of end products.